Pros and Cons of Credit and Debit Cards 

Credit cards and debit cards are essentially ubiquitous these days – but as far as the companies that sell them are concerned, you could always stand to own another. Which is why, from the moment you arrive on campus to the moment you toss your square cap skyward, you’ll get t-shirt cannons’ worth of credit card offers stuffed in your mailbox. It’s also why banks and credit unions are eager to sell you branded debit cards and gain a new (and possibly lifelong) customer. 

So let’s discuss why you might – and might not – want to accept one of these offers… 

Credit Cards 

Pros: Credit cards limit your liability (your legal responsibility to pay back what you owe) for any expenses charged to a stolen card. In this age of identity theft, the law limits the amount a cardholder has to pay if a credit card is stolen to $50. 

Credit cards also: 

Cover expenses you don’t yet have the cash to pay. 

Allow you to make purchases online. 

Help build your credit history. 

Offer rewards (cash back or frequent flier miles). 

Cons: Credit cards can be a little too convenient – convenient enough that it’s easy to lose track of how much you’ve charged to the card until you can’t afford to pay your balance. You might think you would never fall into that trap, and if that’s true, good for you. But forewarned is forearmed, yeah? 

Credit card companies can also charge you: 

Late payment fees of around $30. 

Annual use fees on many cards. 

High [rates MEANING INTEREST RATES?] for credit (15-25%). 

Transaction fees on cash advances. 

“Floating” annual interest rates that can go up without notice. 

Debit Cards 

Pros: Debit cards give you the ability to make off-the-cuff purchases by drawing straight from a checking account – it’s like writing a check, but convenient! Well, sort of – we’ll get to the limitations. Debit cards allow you to: 

Obtain money from ATMs all over the world. 

[Provide you with a receipt you can use to check your balance. DOES THIS REFER TO A BANK STATEMENT?] 

Buy postage stamps at some ATMs. 

Make deposits or transfer funds between accounts. 

[Make purchases online.] 

Cons: You can get into a lot of trouble if someone steals your debit card. If you don’t report the theft within 48 hours, you might be held accountable for [up to?] $500 in unauthorized purchases. If you wait 60 days or more to report the theft, [a thief can clean out your entire account COULDN’T THIS HAPPEN SOONER THAN 60 DAYS?]. You might also: 

Pay a quarterly or annual-use fee. 

Pay a "point-of-sale" fee when swiping the card through a reader and entering your personal identification number (PIN). 

Pay a fee for using the card at an ATM not owned by your bank. 

Many people choose to carry both credit and debit cards, but you should still do your research and make your own decision! Which is really just good life advice in general, don’t you think?